Caz: Law and emotions often at odds

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Deal of a lifetem or no deal?

By Mike Cazalas

Published: Sunday, June 2, 2013 at 10:08 AM.

David Ethridge lived out the promise of many an infomercial last week at the Franklin County Courthouse when he spent $1,000 at a foreclosure sale to pick up a historically significant Apalachicola home valued at close to $900,000. Or did he?

Attorneys for the bank holding the note have already objected to the sale and filed paperwork not only putting everything on hold but asking a judge to vacate the sale, saying it was “clearly an ‘unconscionably inadequate’ price caused solely by the mistake” of the bank’s agent, JMT Management, according to a story written by David Adlerstein.

In a nutshell, Capital Bank’s claim is that it hired JMT Management to attend the sale and bid on the bank’s behalf, protecting the bank from a disaster (for the bank) like the one that unfolded. But the bank claims the person assigned by JMT to attend the sale “had forgotten about the assignment and did not appear for plaintiff at the sale.”

So Ethridge sits on the sidelines wondering if he made the deal of a lifetime while a judge decides if Ethridge is entitled to the property he legally bid on for $1,000 and some $34,000 in back taxes, or if the bank should retain ownership due to another party’s error.

With the plethora of bankruptcies across the country, bank failures and people on both sides pointing the finger at banks, it is hard to work up sympathy for the bank when you consider the law was followed when Ethridge made his purchase.

There is a sense that it seems harsh to punish the bank - by allowing the sale to go through - when it wasn’t the bank’s fault.

It is akin to someone being in a furniture store and seeing a $25 price tag on a sectional that is surrounded by similar sectionals selling for $2,000 or more: the person knows that price isn’t right, but the clerk sells it to him. If the manager arrived the next day, saw the obvious error and called the buyer before the sectional was delivered, would you expect the buyer to understand?

David Ethridge lived out the promise of many an infomercial last week at the Franklin County Courthouse when he spent $1,000 at a foreclosure sale to pick up a historically significant Apalachicola home valued at close to $900,000. Or did he?

Attorneys for the bank holding the note have already objected to the sale and filed paperwork not only putting everything on hold but asking a judge to vacate the sale, saying it was “clearly an ‘unconscionably inadequate’ price caused solely by the mistake” of the bank’s agent, JMT Management, according to a story written by David Adlerstein.

In a nutshell, Capital Bank’s claim is that it hired JMT Management to attend the sale and bid on the bank’s behalf, protecting the bank from a disaster (for the bank) like the one that unfolded. But the bank claims the person assigned by JMT to attend the sale “had forgotten about the assignment and did not appear for plaintiff at the sale.”

So Ethridge sits on the sidelines wondering if he made the deal of a lifetime while a judge decides if Ethridge is entitled to the property he legally bid on for $1,000 and some $34,000 in back taxes, or if the bank should retain ownership due to another party’s error.

With the plethora of bankruptcies across the country, bank failures and people on both sides pointing the finger at banks, it is hard to work up sympathy for the bank when you consider the law was followed when Ethridge made his purchase.

There is a sense that it seems harsh to punish the bank - by allowing the sale to go through - when it wasn’t the bank’s fault.

It is akin to someone being in a furniture store and seeing a $25 price tag on a sectional that is surrounded by similar sectionals selling for $2,000 or more: the person knows that price isn’t right, but the clerk sells it to him. If the manager arrived the next day, saw the obvious error and called the buyer before the sectional was delivered, would you expect the buyer to understand?

At the same time, though, there are thousands who believe the banks treated them pretty harshly when they fell behind on their monthly mortgage payments during the recession. They’ll talk about an inability refinance or get help, hitting brick walls of compressed red tape and being told the rules are the rules.

Reversing the scenario faced by Capital Bank in the Apalachicola case a bit, imagine that your home was up for foreclosure on a specific date and you hired someone to show up on that date and make whatever payment the bank was due in order avoid foreclosure. And imagine that person forgot to do it and the bank foreclosed.

What kind of reception do you think you might get if a few days later you told the bank what happened and would like a “do over?” Should your legal recourse be against the bank or the person who failed to appear?

Posing that question on Facebook, the response was overwhelmingly in favor of the Ethridge.

“I think that if the tables were turned — roles reversed — that the bank would simply say, ‘Sorry, your responsibility, you had plenty of time and notice, blah, blah,’ I think that should be what happens here as well! Fair is fair!” wrote BJ Forehand Demetriades.

Most commenters agreed with Demetriades, but Brian Leebrick, a Panama City attorney, noted that the law is the law and there’s a lesson in that.

“The civics lesson we should take away from this is that sometimes the law makes sense, and that the law is no respecter of persons,” he wrote. “We don't make legal judgments based on whether the side benefiting is popular or unpopular, rich or poor. We develop rules and then apply those rules evenhandedly. I wouldn't want my grandparents to lose $899,000 because of an honest mistake, so why should a bank be treated any differently?”

And that’s the rub, emotion versus the law versus doing what’s right. The law is not supposed to be about emotion and it’s way too often not about what is right.